Abstract
This paper studies how social ties interact with bribery and corruption. In the laboratory, subjects are in triads where two ‘performers’ individually complete an objective real-effort task and an evaluator designates one of them as the winner of a monetary prize. In one treatment dimension, we vary whether performers can bribe the evaluator—where any bribe made is non-refundable, irrespective of the evaluator’s decision. A second treatment dimension varies the induced social ties between the evaluator and the performers. The experimental evidence suggests that both bribes and social ties may corrupt evaluators’ decisions. Bribes decrease the importance of performance in the decision. The effect of social ties is asymmetric. While performers’ bribes vary only little with their ties to the evaluator, evaluators exhibit favoritism based on social ties when bribes are not possible. This ‘social-tie-based’ corruption is, however, replaced by bribe-based corruption when bribes are possible. We argue that these results have concrete consequences for possible anti-corruption policies.
Highlights
People are often asked to evaluate others
We test for treatment effects; we check whether performers’ bribes and evaluators’ corruption vary with the constellation of social ties in the performers-evaluator triads
We use a laboratory experiment to examine the interaction between social ties and corruption
Summary
People are often asked to evaluate others. Evaluations can be informal—like deciding on whom to ask on a date—or formal, such as deciding on whom to hire for a job or when grading an exam. We ask whether and how the effects of favoritism and bribes interact in affecting an evaluation. This is important question to address; as we argue below, the success of anti-corruption policies may well depend on this interaction. Corruption, defined as “the abuse of public office for private gains” (World Bank and IMF 2002), is widespread. It may have a major impact on a country’s economy. Developing countries’ economies are likely to be affected This is because poorer countries are more corrupt. The correlation between a country’s GDP per capita (World Bank 2018) and the corruption perception index (Transparency International 2018) is high, at 0.72 (own calculation, Pearson correlation test, p < 0.01)
Sign-in/Register to view highlights & summary Sign-in/Register to access full text options 
Talk to us
Join us for a 30 min session where you can share your feedback and ask us any queries you have
Schedule a callDisclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.
